This week in history was a decisive one for legal and tax practitioners alike. Plessy v. Ferguson, which upheld racial segregation in public schools, and Brown v. Board of Education, which overturned Plessy and held racial segregation in schools unconstitutional, were decided in 1896 and 1954, respectively. On this week in 1937, Supreme Court Justice Willis Van Devanter retired from the court. Had he stayed, President Franklin D. Roosevelt would’ve added more justices beyond the court’s nine, and much of the second half of the 20th century in legal and tax jurisprudence would’ve played out very differently.
Historical perspective gives us the full arc and trajectory of change. In 1954, the Brown decision was a major headline, but save for a handful of insiders, few would’ve understood the “big deal” of Van Devanter retiring. Had the latter not occurred, the former may not have, either.
Fast forward to the present: The IRS released its Free File Report on Tuesday, paving the way for a free public option for e-filing. Today, free e-filing is a big deal hiding beneath the headlines. In this scenario, taxpayers wouldn’t just save a few bucks on a filing fee—the program would give taxpayers an alternative to a marketplace replete with bad actors and marketing ploys.
When you’re trying to figure out what the “big deal” is in your part of the tax world, Bloomberg Tax offers insightful analysis and thoughtful commentary that can help put things in perspective. Our experts can help cast a light in new directions, so you can zero in on what truly matters.
The Exchange—It’s where great ideas intersect.
—Andrew Leahey
Look for Leahey’s column on Bloomberg Tax, and follow him on Mastodon at @andrew@esq.social.
State Insights
California’s recently enacted eight-year audit rule will make it harder for gig workers and small business owners to survive in the Golden State, say Vanst Law’s Allison Soares and RJS Law’s Lauren Suarez.
Federal Insights
If the IRS can make filing taxes free and easier though its fledgling e-filing system, the for-profit tax preparation industry will never be the same, says Mark DiMassimo of DiGo.
The IRS needs to keep in mind gig workers and those who work multiple jobs in different states as it tests and develops its own free online tax-filing system, says American University tax professor Caroline Bruckner.
Businesses negotiating renewable energy deals should be ready to pivot and reassess contractual terms following the expected release of additional guidance on the tax-and-climate law, say Sidley Austin’s Hagai Zaifman, Noreen Phelan, and Christopher Hutchison.
Carolyn Linkov of Eide Bailly explains the complications and nuances of the tax code’s relationship rules and why they require careful, repetitive reviews to avoid arriving at the wrong answer.
Businesses and their employees can face civil or criminal penalties if they don’t properly follow sales and use tax laws—but there are ways to prevent the worst from happening, say RSM’s Brian Kirkell, David Brunori, and Mo Bell-Jacobs.
Global Insights
Aditya Singh Chandel and Suhail Bansal of AZB & Partners discuss why a recent ruling of the Indian Supreme Court may lead to a significant increase in litigation and challenges in transfer pricing cases, from both tax authorities and taxpayers.
Yvonne Beh and Jeff Sum of Wong & Partners, member firm of Baker McKenzie in Malaysia, look at a potential luxury tax and key tax incentives for investment in high-impact technology and emerging sectors, announced in the Malaysian Budget 2023.
Arkadius Strohoff and Totis Kotsonis of Pinsent Masons look at the newly introduced reporting obligations from the European Commission and how businesses should prepare for the impact.
Merlin Piscitelli of Datasite considers what impact the recent rise in UK corporate tax to 25% for larger businesses may have for merger and acquisition activities, and looks at potential trends in the market.
Commentary
The entertainment industry involves more than just A-list actors. Reps. Judy Chu (D-Calif.) and Vern Buchanan (R-Fla.) share how their new bill aims to give tax parity to low- and middle-income performers.
SAG-AFTRA President Fran Drescher explains why Congress needs to support the Performing Artists Tax Parity Act, which would update a 1986 tax law benefiting working-class actors and performers.
The Biden administration’s Pillar Two tax agreement with the OECD has pushed the US into a subsidy race to the bottom that favors foreign countries—especially China, says Sen. Mike Crapo (R-Idaho).
Columnists
Public funding for sports stadiums is almost always disadvantageous to taxpayers. Andrew Leahey explains why the Oakland Athletics’ planned move to Las Vegas is a bad tax deal for the city, for the state of Nevada, and why it sets a bad continuing precedent for using public funds.
Save the Date
What’s the best way to pitch an idea to a CEO, CFO, or others in senior leadership? Learn how to get your message across in a way that will impress the executives by joining us from noon to 1 p.m. ET on May 24 for How to Present to the C-Suite Like a Pro, part of our free virtual Lunch & Learn series.
We’ve recruited Johnny-Lee Reinoso of C-Level Partners to help you shape your message to resonate with the top people at your tax or law firm. You can join us for this free virtual event, no registration required, by signing on here at noon ET on May 24 or by calling 1-646-931-3860 and entering the meeting ID: 913 3174 5283.
Career Moves
Buck Endemann and Elizabeth Crouse have joined Perkins Coie’s renewable energy practice as partners in San Francisco and Portland.
Melinda Rice and David Insull have been promoted to senior associates at mfg Solicitors in the UK.
Christopher McLoon has joined Cozen O’Connor’s tax practice as a member in Philadelphia.
Jessica Lafferty and Marianne Xu Standley have joined Chamberlain Hrdlicka’s Houston office as associates in the tax planning and business transactions practice.
Andrew Krause and David Ruben have joined GrayRobinson as part of the private client services section in Naples, Fla.
Spotlight
This week’s Spotlight is on Martha “Marty” Pugh, an energy tax specialist and a partner at K&L Gates in Washington, D.C. Pugh advises clients about renewable energy incentives and has developed opportunities for clients related to the Inflation Reduction Act.
News Roundup
It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team.
*Note: Your Bloomberg Tax login will be required to access Tax News.
- With the IRS moving towards offering a free online tool that taxpayers can use to file their tax returns directly with the agency, it faces several pitfalls.
- The Justice Department urged the US Supreme Court not to review the constitutionality of a tax on foreign income that opponents argue would open a legal door for Democratic lawmakers to pursue a federal wealth tax.
- Officials of His Majesty’s Revenue & Customs told the government on Wednesday of a longstanding concern about compliance checks for research and development tax relief.
- New Jersey lowered its gross-income tax revenue forecasts by $2.3 billion.
Our Wish List
For June, we’d welcome thoughtful pieces on graduates, including what tax advisers are telling their clients who are just starting out in the workplace and tax-favored strategies related to paying for higher education. We’re also looking for tax pieces focused on travel and tourism. Specifically, we’d love to see how advisers and planners suggest taxpayers maximize tax benefits for vacation and rental homes.
If you have an interesting, never-published article for publication, you can contact our Insights team by email at TaxInsights@bloombergindustry.com.
Our Team
We talk about tax a lot. But there’s much more that you might hear us talking about if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week.
Watching
Maria Menezes (Practice Lead) and Katharine Butler (Acquisitions Manager): The Eurovision Song Contest—a spectacle of glamour, drama, and silliness involving 37 countries at the start.
Reading
Melanie Cohen (Content Editor): I’m reading “American Ramble” by Neil King Jr., who documented his walk from Washington, D.C., to New York City in 2021 after a four-year battle with cancer.
Listening
Andrew Leahey (Columnist): I’m listening to what now qualifies as a classic album: the Postal Service’s “Give Up.” Before you protest the classic label, it is 20 years old this year.
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